A bengaluru homebuyer was denied basic promised amenities such as Cauvery water, functional DG backup and transfer of common facilities. In a landmark order, the Karnataka Real Estate Regulatory Authority (K-RERA) has directed the builder to complete all promised amenities and transfer all common assets to the homeowners’ association within 90 days.
The order significantly strengthens the rights of apartment owners and reiterates that mere handing over of possession without providing promised amenities does not amount to valid possession under the Real Estate (Regulation and Development) Act, 2016 (RERA).
Background of the Dispute
Mr. Jagannathan, a senior citizen from Arasinakunte in Bengaluru Rural District, purchased an apartment after paying nearly Rs 40 lakh and received possession on February 25, 2017.
According to the complaint, the developer had promised:
- Cauvery water supply to all apartments
- Separate pipelines for borewell water and treated water
- Separate overhead tanks for Cauvery water storage
- DG power backup
- Formation of apartment owners’ association
- Transfer of common areas and maintenance funds
However, even after more than six years, several of these promises remained unfulfilled.
Builder Collected Cauvery Water Deposit But Failed to Provide Connection
The homebuyer alleged that the builder collected Rs 14,895 as a deposit for providing Cauvery water connection.
Despite collecting the amount, the builder:
- Failed to install the required infrastructure;
- Did not create separate storage facilities;
- Did not provide Cauvery water to residents.
The complaint also alleged that the builder never furnished:
- Audited accounts;
- Maintenance receipts;
- Details of corpus funds;
- Books of accounts since 2017.
DG Power Supply Disconnected
The homebuyer further complained that the builder disconnected the apartment’s DG backup power supply.
Being a senior citizen, the complainant stated that uninterrupted electricity was necessary to preserve medicines stored in his refrigerator, and the disconnection caused significant hardship.
K-RERA: Mere Possession Without Amenities Is Not Valid Possession
In its order dated June 3, 2026 (Complaint No. 00002/2024), K-RERA made important observations.
The Authority held:
“Mere delivery of possession without providing amenities in a functional condition is not valid possession.”
K-RERA further observed that providing certain amenities does not absolve the builder from completing all the amenities promised in the prospectus, brochure, and agreements.
Accordingly, the homebuyer is entitled to:
- Completion of all promised amenities;
- Functional infrastructure;
- Proper handover of common facilities;
- Refund and accounting of corpus funds.
Builder Must Complete Assured Amenities
K-RERA directed the developer to:
Restore DG Power Supply
The builder must immediately restore DG generator backup power supply to the complainant’s apartment.
Complete All Promised Amenities
The developer has been ordered to complete:
- Cauvery water infrastructure;
- Water supply systems;
- Common facilities;
- All other amenities promised under the agreements.
Builder Must Transfer Common Assets Within 90 Days
One of the most significant directions issued by K-RERA concerns the transfer of common facilities to the apartment owners’ association.
The Authority directed the builder to transfer the following within 90 days:
- Land Khata;
- BESCOM electricity meters;
- Water meters;
- Corpus fund;
- Balance amount in escrow account;
- Maintenance accounts and records.
Collected Funds Are Held in Trust
K-RERA reiterated the legal position under Sections 11(4)(e), 11(4)(g), and 17 of the RERA Act.
The Authority held that:
Funds collected from homebuyers towards maintenance, sinking funds and corpus funds are held by the builder in trust and cannot be used for construction activities or personal purposes.
The builder has a statutory obligation to:
- Facilitate formation of the association of allottees;
- Transfer common areas;
- Transfer maintenance and sinking funds;
- Hand over all title documents.
Failure to Transfer Common Areas Is a Continuing Cause of Action
K-RERA observed that failure to transfer common areas and maintenance funds constitutes a:
Continuing Cause of Action
This means apartment owners can continue pursuing legal remedies until the builder fulfils these obligations.
Builder Responsible for Outgoings Until Transfer
The Authority further clarified that under Section 11(4)(g) of RERA, the builder remains responsible for:
- Property taxes;
- Water charges;
- Electricity charges;
- Maintenance expenses;
- Any encumbrances on the property.
This responsibility continues until the project and common areas are formally transferred to the association of allottees.
Builder Must Adhere to Approved Plans and Promised Amenities
K-RERA also referred to Section 14 of the RERA Act, which mandates that developers must construct projects strictly in accordance with:
- Sanctioned plans;
- Layout plans;
- Approved specifications;
- Terms of the Agreement for Sale.
The Authority held:
A promoter cannot simply hand over possession and walk away without providing the promised amenities in functional condition.
Why This Order Is Important for Homebuyers
The K-RERA order is significant because it reinforces that:
Homebuyers have the right to:
✔ Functional amenities as promised.
✔ Transfer of common areas and facilities.
✔ Transparency in maintenance accounts.
✔ Formation of owners’ association.
✔ Access to corpus funds and escrow balances.
✔ Seek remedies if promised facilities are not provided.
Key Directions Issued by K-RERA
The builder has been directed to:
- Restore DG power supply;
- Complete all assured amenities;
- Transfer land Khata;
- Transfer BESCOM and water meters;
- Transfer corpus fund;
- Transfer escrow balance;
- Submit maintenance accounts;
- Complete the transfer process within 90 days.
Conclusion
The Karnataka RERA order sends a strong message that builders cannot escape their statutory obligations merely by handing over possession of apartments.
A homebuyer is entitled not only to the physical possession of a flat but also to:
- Functional amenities,
- Proper infrastructure,
- Transparent financial management,
- Transfer of common areas and funds.
The decision significantly strengthens apartment owners’ rights and reinforces the fundamental objective of the Real Estate (Regulation and Development) Act, 2016—to protect homebuyers and ensure accountability in the real estate sector.
